Report Released to House of Assembly

Auditor General Jacques Lapointe made 58 recommendations to government with the release of his third report to the House of Assembly today, June 6.

The report's seven chapters summarize the audit work completed by his office during the first half of 2007.

The auditor general reports that he audited the management and use of diagnostic imaging equipment at Capital Health and the Cape Breton District Health Authority. He concluded that processes were in place to provide for patient safety and to prioritize patient access to services.

However, the auditor general recommended that clinical practice guidelines be used to reduce the risk of inappropriate, or medically unnecessary, use of equipment. As well, quality assurance processes should be consistently applied to equipment and its use, to better ensure patient safety. The report notes that diagnostic imaging equipment in the province is generally older than in other provinces and that the two health authorities have estimated capital equipment needs totaling more than $130 million.

The Department of Health does not have a formal capital planning process to provide for replacement and upgrade of medical equipment and the auditor general recommends that the Department of Health prepare such a plan to acquire and allocate equipment on a systematic and priority basis.

The auditor general performed an audit of Emergency Health Services' ground ambulance program. The Department of Health contracts the operations of the program to Emergency Medical Care Inc. -- a wholly-owned subsidiary of Medavie Blue Cross. Emergency Medical Care receives 99 per cent of its revenue from the province, but neither the contract nor the Auditor General Act provide the auditor general with audit access to the company. It voluntarily provided audit access in this case, but the auditor general recommends that any significant service delivery contracts should include audit access for his office.

In addition, the report recommends that Emergency Health Services improve its monitoring and audit of Emergency Medical Care's financial information and collection of user fees. The ambulance provider uses sophisticated techniques to deploy ambulances across the province and meet response times. However, delays at emergency rooms in HRM cause inefficiencies and create a risk of delays in emergency response across the province.

The Long-term Care program has changed significantly since 2003 when the auditor general last audited nursing homes. Legislation governing the program is now outdated and needs to be modified to better reflect the current program. The accountability framework for nursing homes needs to be improved to clearly set out performance expectations and reporting requirements and to improve monitoring of information received.

Weaknesses in the annual inspection process need to be addressed to improve control over the quality of care and compliance with legislation in nursing homes. The auditor general audited the Single Entry Access System for Continuing Care and found instances of inaccurate information and possible non-compliance with nursing home placement policies that point to the need for improved quality control over wait-list data and its use.

The Department of Justice's maintenance enforcement program administers and enforces court orders requiring individuals to make spousal- or child-support payments. The audit found that the program's trust-account assets were not adequately safeguarded because of significant deficiencies in internal controls over receipts and disbursements, that no financial statements are prepared, and that there is no annual audit.

The auditor general also notes that collection processes are inadequate to ensure compliance with maintenance orders. For example, case data was found to be inaccurate, the program was not complying with its own enforcement policies and there were many cases where a federal notice of intercept was not in place because the program did not have the information it needed to arrange for them.

These deficiencies impact the effectiveness of the collection process. In addition, the program made inadequate use of performance information to assess the efficiency and effectiveness of its operations.

An audit of the Metropolitan Regional Housing Authority and the Cape Breton Island Housing Authority found that while controls over revenues are generally adequate, some instances were found of inaccurate information being used to calculate rent charges. The auditor general also found weaknesses in controls over access to the authorities' computer systems, and in control procedures relating to the processing of expenditures at both housing authorities. Control weaknesses increase the risk of inappropriate payments and financial loss.

The report also recommended that non-financial performance information be developed to better assess authorities' achievement of departmental objectives.

Finally, the auditor general notes that government has taken significant steps towards presenting its revenue estimates in full compliance with generally accepted accounting principles. The auditor general commends government staff for this improvement to government's financial reporting. However, he notes that his opinion on the March 2007 revenue estimates was still qualified because the estimates were not presented fully on the same basis as the province's financial statements, and no support was provided for third-party revenues of certain consolidated government units.

The auditor general also acknowledges that there has been progress on resolving access to information problems reported in his December 2006 report and expresses support for management's intention to provide government financial statements on a more timely basis this year.

The auditor general notes that some of the findings in the report may have broader applications beyond the particular entities audited. For example, deficiencies were found in basic internal controls related to financial and computer systems in some program areas. The importance of internal controls, and of management's responsibility for their implementation, have gained attention in recent years after international corporate failures, and the auditor general urges the government to focus on the design and proper functioning of internal controls. The auditor general also emphasizes the need for clear accountability frameworks to define performance expectations for entities funded by the province.

The full June 2007 Report of the Auditor General to the Nova Scotia House of Assembly is available on the auditor general's website at www.gov.ns.ca/audg/ or by contacting the Office of the Auditor General at (902)424-5907 or oaginfo@gov.ns.ca

The auditor general plans to issue his next report in December 2007. It will include the results of audits completed during the second half of 2007.